The Week in Review – January 10, 2008

Two thousand eight has been off to a fairly slow start as financial transactions go, and that’s not just in shipping. The graph below shows a dramatic drop-off in US M&A volume during the first week of the year, making 2008 to date the slowest year this millennium. As far as the credit market official shipping numbers for 2007 have not yet been released, but we do know that, credit crunch aside, according to Dealogic global syndicated loan volume was up 20% in 2007 to $1.77 trillion, from $1.28 trillion in 2006. However much of this success can be attributed to the first half of the year, which saw a record $1.09 trillion raised. Issuance in 2H07 actually fell be 38% versus the same period in 2006. What’s more, there were quite a few deals in the pipeline when the credit crisis struck that still managed to get done before the end of the year. Without an economic upturn early 2008 could see issuance fall further. However weakness does not go across the board; according to Dealogic figures the Asia Pacific region (ex Japan) was up 41% over 2006, with Australasia in particular up 62%, and Middle East volume was up an impressive 90%.

The shipping deal markets, however, while relatively slow, have remained afloat. Most notably, HSH Nordbank met with success and a warm reception when it placed EUR 1 billion of its shipping debt in a secured German bond-like instrument known as a Pfandbrief. Bucking the M&A trend, US-listed Navios and Seaspan both announced noteworthy acquisitions just three days into January. The market also understands that US-listed Excel Maritime will be purchasing US-listed Quintana Maritime for $27 per share. However no official information has been issued and based on a closing share price of $22.96 for QMAR, investors have yet to reach the same understanding.

This is only an excerpt of The Week in Review – January 10, 2008

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